Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report:

May 20, 2024

(Date of earliest event reported)

Star Equity Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-35947

33-0145723

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

53 Forest Ave, Suite 101

Old Greenwich, CT 06870

(Address of principal executive offices, including zip code)

(203) 489-9500

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	STRR	NASDAQ Global Market
Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share	STRRP	NASDAQ Global Market
Series C Participating Preferred Stock, par value $0.0001 per share Purchase Rights

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§232.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On May 20, 2024, Star Equity Holdings, Inc. (the “Registrant”) issued a press release announcing financial results for the three and three months ended March 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits:


Exhibit No.						Description

99.1						Press Release of Star Equity Holdings, Inc. dated May 20, 2024
99.2						Information Related to the Use of Non-GAAP Financial Measures
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


						Star Equity Holdings, Inc.

			By:			/s/ Richard K. Coleman, Jr.
						Richard K. Coleman, Jr. Chief Executive Officer

Date: May 20, 2024

Exhibit 99.1


For immediate release
May 20, 2024

Star Equity Holdings, Inc. Announces 2024 First Quarter Financial Results

Ended the first quarter with cash and cash equivalents of $14.7 million

Well positioned to expand existing businesses organically and through acquisitions

Timber Technologies acquisition marks a significant step forward in growth strategy

Old Greenwich, CT. - Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star” or the “Company”), a diversified holding company, reported today its financial results for the first quarter (Q1) ended March 31, 2024. All 2024 and 2023 amounts in this release are unaudited.

Following the sale of our Digirad Health business on May 4, 2023, all financial results for the 2023 reporting period, unless stated otherwise, relate to continuing operations, which currently include two divisions: Building Solutions (formerly known as Construction) and Investments.

Q1 2024 Financial Highlights vs. Q1 2023 (unaudited)

•Revenues decreased by 26.1% to $9.1 million from $12.3 million.

•Gross profit decreased by 63.1% to $1.6 million from $4.3 million.

•Net loss from continuing operations was $2.2 million (or $0.14 per basic and diluted share) compared to net income from continuing operations of $16 thousand (or $0.00 per basic and diluted share).

•Non-GAAP adjusted net loss was $1.4 million (or $0.09 per basic and diluted share) compared to net income of $0.5 million (or $0.03 per basic and diluted share).

•Non-GAAP adjusted EBITDA was a loss of $1.1 million versus income of $0.8 million.

•As of March 31, 2024, cash and cash equivalents increased to $14.7 million versus cash and cash equivalents of $5.0 million at March 31, 2023.

•Our TTG common equity investment and Note Receivable from TTG, including accrued interest, are recorded at cost and amounted to $6.0 million and $7.6 million, respectively, at March 31, 2024.

•Debt increased to $1.9 million at March 31, 2024 from $0.7 million at March 31, 2023.

Rick Coleman, Chief Executive Officer, noted, “In the first quarter of 2024, Building Solutions revenue and gross profit both declined versus the first quarter of 2023. Although our sales pipeline and signed backlog are roughly equivalent to historical averages, our customers are experiencing the effects of credit tightening resulting in delays in getting financing. In particular, financing delays caused large commercial projects expected to commence in Q1 to slip from the first quarter into future periods.”

Mr. Coleman continued, “We believe there is strong demand for new construction in the markets we serve, and the current macroeconomic impacts are temporary. We remain focused on all elements of our growth strategy including Building Solutions division expansion, acquisitions in new industries, and exploring new opportunities at our Investments division.”

Jeff Eberwein, Executive Chairman, added, “We are very pleased to announce our acquisition of Timber Technologies, a WI-based engineered wood products (“EWP”) manufacturer, effective May 17. The acquisition creates scale, diversifies our revenue sources and end markets, and expands our client base and geographic footprint. Identifying, evaluating, and completing accretive acquisitions is part of our holding company growth strategy for delivering shareholder value.”

For more information on the transaction, please visit www.starequity.com.

Revenues

The Company’s Q1 2024 revenues decreased 26.1% to $9.1 million from $12.3 million in Q1 2023.


Revenues in $ thousands	Q1 2024		Q1 2023		% change
Building Solutions	$	9,118	$	12,346	(26.1)	%
Investments	188		158		19.0	%
Intersegment elimination	(188)		(158)		19.0	%
Total Revenues	$	9,118	$	12,346	(26.1)	%

Q1 2024 Building Solutions revenue decreased by 26.1% from the prior year as a result of slower business activity at both KBS and EBGL. Economic headwinds, higher interest rates, and weather related project delays contributed to the slowdown which we believe to be temporary. Specifically, some of our largest commercial projects expected to commence in Q1 were delayed into future periods. Our backlog and sales pipeline indicate continued strong demand for new projects, although the revenue impact and timing are uncertain.

Gross Profit


Gross profit (loss) in $ thousands	Q1 2024			Q1 2023			% change
Building Solutions	$	1,678		$	4,329		(61.2)	%
Building Solutions gross margin	18.4		%	35.1		%	(16.7)	%
Investments	84			95			(11.6)	%

Intersegment elimination	(188)			(158)			19.0	%
Total gross profit	$	1,574		$	4,266		(63.1)	%
Total gross margin	17.3		%	34.6		%	(17.3)	%

Q1 2024 Building Solutions gross profit decreased 61.2% primarily due to lower revenues.

Operating Expenses

On a consolidated basis, Q1 2024 sales, general and administrative (“SG&A”) expenses increased by $0.4 million, or 11.1%, versus the prior year period. Also, SG&A as a percentage of revenue increased in Q1 2024 to 44.9% versus 29.8% in Q1 2023. The major drivers of the increase in SG&A were increases in legal and outside services expense related to our mergers and acquisitions activity.

Net Income

Q1 2024 net loss from continuing operations was $2.2 million, or $0.14 per basic and diluted share, compared to net income of $16 thousand, or $0.00 per basic and diluted share in the same period in the prior year. Q1 2024 non-GAAP adjusted net loss from continuing operations was $1.4 million, or $0.09 per basic and diluted share, compared to non-GAAP adjusted net income from continuing operations of $0.5 million, or $0.03 per basic and diluted share, in the prior year period.

Non-GAAP Adjusted EBITDA

Q1 2024 non-GAAP adjusted EBITDA was a loss of $1.1 million versus income of $0.8 million in the same quarter of the prior year, primarily due to decreased revenues.

Operating Cash Flow

Q1 2024 cash flow from operations was an outflow of $2.4 million, compared to an inflow of $5.1 million for Q1 2023. The decrease in net cash provided by operating activities is attributable to lower results from operations, particularly in our Building Solutions division, and increased net working capital expenditures.

Preferred Stock Dividends

In Q1 2024, the Company’s board of directors declared a cash dividend to holders of our Series A Preferred Stock of $0.25 per share, for an aggregate amount of approximately $0.5 million. The record date for this dividend was February 1, 2024, and the payment date was March 11, 2024.

NOL Carryforward

As of December 31, 2023, Star had $43.2 million of U.S. federal net operating losses (“NOL”), which the Company considers to be a valuable asset for its stockholders. In order to protect the value of the NOL for all stockholders, the Company has a rights agreement and charter amendment in place that limit beneficial ownership of the Company’s common stock to 4.99%.

Stockholders who wish to own more than 4.99% of Star common stock, or who already own more than 4.99% of Star common stock and wish to buy more, may only acquire additional shares with the Board’s prior written approval.

Conference Call Information

A conference call is scheduled for 10:00 a.m. ET (7:00 a.m. PT) on May 20, 2024 to discuss the results and management’s outlook. The call may be accessed by dialing (833) 630-1956 (toll free) or (412) 317-1837 (international), five minutes prior to the scheduled start time and referencing Star Equity. A simultaneous webcast of the call may be accessed online from the Events & Presentations link on the Investor Relations page at www.starequity.com/events-and-presentations/presentations; an archived replay of the webcast will be available within 15 minutes of the end of the conference call.

If you have any questions, either prior to or after our scheduled Earnings Conference call, please e-mail admin@starequity.com or lcati@equityny.com.

Use of Non-GAAP Financial Measures by Star Equity Holdings, Inc.

This release presents the non-GAAP financial measures “adjusted net income (loss),” “adjusted net income (loss) per basic and diluted share,” and “adjusted EBITDA from continuing operations.” The most directly comparable measures for these non-GAAP financial measures are “net income (loss),” “net income (loss) per basic and diluted share,” and “cash flows from operating activities.” The Company has included below unaudited adjusted financial information, which presents the Company’s results of operations after excluding acquired intangible asset amortization, unrealized gain (loss) on equity securities and lumber derivatives, litigation costs, transaction costs, financing costs, and income tax adjustments. Further excluded in the measure of adjusted EBITDA are stock-based compensation, interest, depreciation, and amortization.

A discussion of the reasons why management believes that the presentation of non-GAAP financial measures provides useful information to investors regarding the Company’s financial condition and results of operations is included as Exhibit 99.2 to the Company’s report on Form 8-K filed with the Securities and Exchange Commission on May 20, 2024.

About Star Equity Holdings, Inc.

Star Equity Holdings, Inc. is a diversified holding company with two divisions: Building Solutions and Investments. Prior to the May 4, 2023 sale of Digirad Health, Star Equity Holdings had three divisions: Healthcare, Building Solutions, and Investments.

Building Solutions

Our Building Solutions division operates in three businesses: (i) modular building manufacturing; (ii) structural wall panel and wood foundation manufacturing, including building supply distribution operations; and (iii) glue-laminated timber (glulam) column, beam, and truss manufacturing.

Investments

Our Investments division manages and finances the Company’s real estate assets as well as its investment positions in private and public companies.

Healthcare

Our Healthcare division, which operated as Digirad Health until the sale of Digirad Health on May 4, 2023, provided products and services in the area of nuclear medical imaging with a focus on cardiac health.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release that are not statements of historical fact are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon management’s current beliefs, views, estimates and expectations, including as pertains to (i) the plans and objectives of management for future operations, including plans or objectives relating to acquisitions and related integration, (ii) projections of income, EBITDA, earnings per share, capital expenditures, cost reductions, capital structure or other financial items, (iii) the future financial performance of the Company or acquisition targets and (iv) the assumptions underlying or relating to any statement described above. Forward-looking statements generally are identified by the words “believe”, “expect”, “anticipate”, “estimate”, “project”, “intend”, “plan”, “should”, “may”, “will”, “would”, “will be”, “will continue” or similar expressions. Such forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over. Actual results and the timing of certain events and circumstances may differ materially from those described above as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, the cyclical nature of our operating businesses, the Company’s debt and its ability to repay, refinance, or incur additional debt in the future; the Company’s need for a significant amount of cash to service, repay the debt, and to pay dividends on the Company’s preferred stock; the restrictions contained in the debt agreements that limit the discretion of management in operating the business; legal, regulatory, political and economic risks in markets and public health crises that reduce economic activity and cause restrictions on operations; the length of time associated with servicing customers; losses of significant contracts or failure to get potential contracts being discussed; disruptions in the relationship with third party vendors; accounts receivable turnover; insufficient cash flows and resulting lack of liquidity; the Company's inability to expand its business operations; the liability and compliance costs regarding environmental regulations; the lack of product diversification; existing or increased competition; risks to the price and volatility of the Company’s common stock and preferred stock; stock volatility and in liquidity; risks to preferred stockholders of not receiving dividends and risks to the Company’s ability to pursue growth opportunities if the Company continues to pay dividends according to the terms of the Company’s preferred stock; the Company’s ability to execute on its business strategy (including any cost reduction plans); the Company’s failure to realize expected benefits of restructuring and cost-cutting actions; the Company’s ability to preserve and monetize its net operating losses; risks associated with the Company’s possible pursuit of acquisitions; the Company’s ability to consummate successful acquisitions and execute related integration; general economic and financial market conditions; failure to keep pace with evolving technologies and difficulties integrating technologies; system failures; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; and the continued demand for and market acceptance of the Company’s services. For a detailed discussion of cautionary statements and risks that may affect the Company’s future results of operations and financial results, please refer to the Company’s filings with the Securities and Exchange Commission, including, but not limited to, the risk factors in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. This press release reflects management’s views as of the date presented.

All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations. Therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.


For more information contact:
Star Equity Holdings, Inc.			The Equity Group
Rick Coleman			Lena Cati
Chief Executive Officer			Senior Vice President
203-489-9508			212-836-9611
rick.coleman@starequity.com			lcati@equityny.com

(Financial tables follow)

Star Equity Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited) (In thousands, except for per share amounts)


	Three Months Ended March 31,
	2024		2023
Revenues:

Building Solutions**	$	9,118	$	12,346

Total revenues	9,118		12,346

Cost of revenues:

Building Solutions**	7,440		8,017
Investments	104		63
Total cost of revenues	7,544		8,080

Gross profit	1,574		4,266

Operating expenses:
Selling, general and administrative	4,094		3,684
Amortization of intangible assets	442		430


Total operating expenses	4,536		4,114

Income (loss) from continuing operations	(2,962)		152

Other income (expense):
Other income (expense), net	399		(109)
Interest income (expense), net	374		(27)

Total other income (expense), net	773		(136)

Income (loss) before income taxes from continuing operations	(2,189)		16
Income tax benefit (provision) from continuing operations	(35)		—
Income (loss) from continuing operations, net of tax	(2,224)		16
Income (loss) from discontinued operations, net of tax	—		419
Net income (loss)	(2,224)		435
Dividend on Series A perpetual preferred stock	(479)		(479)
Net income (loss) attributable to common shareholders	$	(2,703)	$	(44)

Net income (loss) per share
Net income (loss) per share, continuing operations
Basic and Diluted*	$	(0.14)	$	—

Net income (loss) per share, discontinued operations
Basic and Diluted*	$	—	$	0.03

Net income (loss) per share
Basic and Diluted*	$	(0.14)	$	0.03




Net income (loss) per share, attributable to common shareholders

Diluted*	$	(0.17)	$	—
Weighted-average common shares outstanding
Basic and Diluted*	15,842		15,516


Dividends declared per share of Series A perpetual preferred stock	$	0.25	$	0.25

*Earnings per share may not add due to rounding

**Formerly known as Construction

Star Equity Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited) (In thousands, except share amounts)


	March 31, 2024 (unaudited)		December 31, 2023
Assets:
Current assets:
Cash and cash equivalents	$	14,662	$	18,326
Restricted cash	615		620
Investments in equity securities	5,575		4,838
Lumber derivative contracts	—		19
Accounts receivable, net of allowances of $206 and $191, respectively	4,584		6,004
Note receivable, current portion	399		399
Inventories, net	4,720		3,420
Other current assets	829		1,180
Assets held for sale	4,295		4,346

Total current assets	35,679		39,152
Property and equipment, net	3,537		3,482
Operating lease right-of-use assets, net	1,371		1,470
Intangible assets, net	12,067		12,518
Goodwill	4,438		4,438


Cost method investment	6,000		6,000
Notes receivable	8,528		8,427
Other assets	29		9

Total assets	$	71,649	$	75,496

Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable	$	1,503	$	1,571
Accrued liabilities	1,028		1,506
Accrued compensation	1,018		1,772
Accrued warranty	45		44
Lumber derivative contracts	1		—

Deferred revenue	1,696		1,377
Short-term debt	1,924		2,019

Operating lease liabilities	411		403
Finance lease liabilities	35		42



Total current liabilities	7,661		8,734

Deferred tax liabilities	320		318
Operating lease liabilities, net of current portion	995		1,102
Finance lease liabilities, net of current portion	34		43


Total liabilities	9,010		10,197



Stockholders’ Equity:
Preferred stock, $0.0001 par value: 10,000,000 shares authorized: Series A Preferred Stock, 8,000,000 shares authorized, liquidation preference ($10.00 per share), 1,915,637 shares issued and outstanding at March 31, 2024. (Liquidation preference: $18,988,390 as of March 31, 2024 and December 31, 2023.)	18,988		18,988
Series C Preferred stock, $0.0001 par value: 25,000 shares authorized; no shares issued or outstanding	—		—
Common stock, $0.0001 par value: 50,000,000 shares authorized; 15,848,202 and 15,826,217 shares issued and outstanding (net of treasury shares) at March 31, 2024 and December 31, 2023, respectively	2		2
Treasury stock, at cost; 258,849 shares at March 31, 2024 and December 31, 2023, respectively	(5,728)		(5,728)
Additional paid-in capital	159,690		160,126

Accumulated deficit	(110,313)		(108,089)
Total stockholders’ equity	62,639		65,299
Total liabilities and stockholders’ equity	$	71,649	$	75,496

Star Equity Holdings, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited) (In thousands, except per share amounts)


	Three Months Ended March 31,
	2024		2023
Net income (loss) from continuing operations	$	(2,224)	$	16
Acquired intangible amortization	442		430
Unrealized loss (gain) on equity securities (1)	(228)		(2)
Unrealized loss (gain) on lumber derivatives (2)	20		(43)

Litigation costs	9		—

Transaction costs related to sale (3)	101		—
Transaction costs related to mergers and acquisitions (4)	431		—





Financing costs (5)	8		95
Income tax (benefit) provision	35		—
Non-GAAP adjusted net income (loss) from continuing operations	$	(1,406)	$	496

Net income (loss) from continuing operations per diluted share	$	(0.14)	$	—
Acquired intangible amortization	0.03		0.03
Unrealized loss (gain) on equity securities (1)	(0.01)		—
Unrealized loss (gain) on lumber derivatives (2)	—		—

Litigation costs	—		—

Transaction costs related to sale (3)	0.01		—
Transaction costs related to mergers and acquisitions (4)	0.03		—





Financing costs (5)	—		0.01
Income tax (benefit) provision	—		—
Non-GAAP adjusted net income (loss) from continuing operations per basic and diluted share (6)	$	(0.09)	$	0.03

(1)Reflects adjustments for any unrealized gains or losses in equity securities.

(2)Reflects adjustments for any unrealized gains or losses in lumber derivatives value..

(3)Reflects one time transaction costs related to the sale of the Healthcare Division.

(4)Reflects one time transaction costs related to potential mergers and acquisitions.

(5)Reflects financing costs from our credit facilities.

(6)Per share amounts are computed independently for each discrete item presented. Therefore, the sum of the quarterly per share amounts will not necessarily equal to the total for the year, and the sum of individual items may not equal the total.

Star Equity Holdings, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited) (In thousands)


For The Three Months Ended March 31, 2024	Building Solutions		Investments		Star Equity Corporate		Total

Net income (loss) from continuing operations	$	(925)	$	463	$	(1,762)	$	(2,224)
Depreciation and amortization	567		104		17		688
Interest (income) expense	36		(191)		(219)		(374)
Income tax (benefit) provision	—		—		35		35
EBITDA from continuing operations	(322)		376		(1,929)		(1,875)

Unrealized loss (gain) on equity securities (1)	—		(228)		—		(228)
Unrealized loss (gain) on lumber derivatives (2)	20		—		—		20
Interest income(3)	—		410		—		410
Litigation costs	—		—		9		9
Stock-based compensation	10		—		48		58

Transaction costs related to sale (4)	—		—		101		101
Transaction costs related to mergers and acquisitions (5)	—		—		431		431
Financing costs (6)	8		—		—		8
Non-GAAP adjusted EBITDA from continuing operations	$	(284)	$	558	$	(1,340)	$	(1,066)


For The Three Months Ended March 31, 2023	Building Solutions		Investments		Star Equity Corporate		Total

Net income (loss) from continuing operations	$	1,654	$	(51)	$	(1,587)	$	16
Depreciation and amortization	505		63		4		572
Interest (income) expense	29		22		(24)		27
Income tax (benefit) provision	—		—		—		—
EBITDA from continuing operations	2,188		34		(1,607)		615

Unrealized loss (gain) on equity securities (1)	—		(2)		—		(2)
Unrealized loss (gain) on lumber derivatives (2)	(43)		—		—		(43)

Stock-based compensation	5		—		96		101





Financing costs (6)	84		11		—		95
Non-GAAP adjusted EBITDA from continuing operations	$	2,234	$	43	$	(1,511)	$	766

(1)Reflects adjustments for any unrealized gains or losses on equity securities.

(2)Reflects adjustments for any unrealized gains or losses in lumber derivatives value.

(3)We allocate all corporate interest income to the Investments Division.

(4)Reflects one time transaction costs related to the sale of the Healthcare Division.

(5)Reflects one time transaction costs related to potential mergers and acquisitions.

(6)Reflects financing costs from our credit facilities.

Star Equity Holdings, Inc.

Supplemental Debt Information

(Unaudited) (In thousands)

A summary of the Company’s credit facilities are as follows:


	March 31, 2024			December 31, 2023
	Amount		Weighted-Average Interest Rate	Amount		Weighted-Average Interest Rate

Revolving Credit Facility - Premier	$	1,924	9.25%	$	2,019	9.25%


Total Short-term Revolving Credit Facilities	$	1,924	9.25%	$	2,019	9.25%




Total Short-term debt	$	1,924	9.25%	$	2,019	9.25%

Star Equity Holdings, Inc.

Supplemental Segment Information

(Unaudited) (In thousands)


	Three Months Ended March 31,
	2024		2023
Revenue by segment:
Building Solutions	$	9,118	$	12,346
Investments	188		158
Intersegment elimination	(188)		(158)
Consolidated revenue	$	9,118	$	12,346

Gross profit (loss) by segment:
Building Solutions	$	1,678	$	4,329
Investments	84		95
Intersegment elimination	(188)		(158)
Consolidated gross profit	$	1,574	$	4,266

Income (loss) from continuing operations by segment:
Building Solutions	$	(898)	$	1,782
Investments	44		(19)
Corporate, eliminations and other	(2,108)		(1,611)
Segment income (loss) from operations	$	(2,962)	$	152

Depreciation and amortization by segment:
Building Solutions	$	567	$	505
Investments	104		63
Star Equity corporate	17		4
Total depreciation and amortization	$	688	$	572

Exhibit 99.2

Use of Non-GAAP Financial Measures

In addition to financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), information containing non-GAAP financial measures for Star Equity Holdings, Inc. (the “Company”) was disclosed in the Company's press release (the “Press Release”) dated May 20, 2024 announcing results for the three months ended March 31, 2024 that accompanied a conference call held by the Company on May 20, 2024. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Management encourages readers to rely upon the GAAP numbers, but includes the non-GAAP financial measures as supplemental metrics to assist readers. Definitions of the non-GAAP financial measures are included in the Press Release.

In the Press Release, the Company presented the non-GAAP financial measures “adjusted net income (loss),” “adjusted net income (loss) per basic and diluted share,” “adjusted EBITDA” Company management uses these non-GAAP financial measures to evaluate the Company's performance. Company management finds it useful to use financial measures that do not include acquired intangible asset amortization, unrealized gain (loss) on lumber derivatives and available-for-sale securities, gain (loss) on sale of assets, lease write offs, litigation costs, financing costs, transaction costs, financing fees, and income tax adjustments. While we may have these types of items and charges in the future, Company management believes that they are not reflective of the day-to-day offering of its products and services and relate more to strategic, multi-year corporate actions, without predictable trends, and that may obscure the trends and financial performance of the Company's core business. In the case of “adjusted EBITDA,” Company management believes the exclusion of interest, taxes, depreciation and amortization, and stock-based compensation is a very common measure utilized in the investment community and it helps Company management benchmark its operations and results with the industry.

The limitation associated with using these non-GAAP financial measures is that these measures exclude items that impact the Company's current period operating results. This limitation is best addressed by using these non-GAAP financial measures in combination with “net income (loss),” “net income (loss) per basic and diluted share,” and "operating cash flow" (the most comparable GAAP measures) because these non-GAAP financial measures do not reflect items that impact current period operating results and may be higher or lower than the most comparable GAAP measure.

Cover	May 20, 2024
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0000707388
Document Information [Line Items]
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Address, Postal Zip Code	06870
Entity Address, Address Line One	53 Forest Ave
Entity Address, City or Town	Old Greenwich
Entity Address, State or Province	CT
City Area Code	203
Local Phone Number	489-9500
Entity Registrant Name	Star Equity Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-35947
Entity Tax Identification Number	33-0145723
Document Period End Date	May 20, 2024
Document Type	8-K
Entity Address, Address Line Two	Suite 101
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	STRR
Security Exchange Name	NASDAQ
Series A
Document Information [Line Items]
Title of 12(b) Security	Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share
Trading Symbol	STRRP
Security Exchange Name	NASDAQ
Series C Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Series C Participating Preferred Stock, par value$0.0001 per share Purchase Rights